Correlation Between China Overseas and Mitsui Fudosan
Can any of the company-specific risk be diversified away by investing in both China Overseas and Mitsui Fudosan at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Overseas and Mitsui Fudosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Overseas Land and Mitsui Fudosan Co, you can compare the effects of market volatilities on China Overseas and Mitsui Fudosan and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Overseas with a short position of Mitsui Fudosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Mitsui Fudosan.
Diversification Opportunities for China Overseas and Mitsui Fudosan
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Mitsui is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and Mitsui Fudosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Fudosan and China Overseas is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Overseas Land are associated (or correlated) with Mitsui Fudosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Fudosan has no effect on the direction of China Overseas i.e., China Overseas and Mitsui Fudosan go up and down completely randomly.
Pair Corralation between China Overseas and Mitsui Fudosan
Assuming the 90 days horizon China Overseas Land is expected to under-perform the Mitsui Fudosan. In addition to that, China Overseas is 1.93 times more volatile than Mitsui Fudosan Co. It trades about -0.25 of its total potential returns per unit of risk. Mitsui Fudosan Co is currently generating about -0.02 per unit of volatility. If you would invest 785.00 in Mitsui Fudosan Co on September 2, 2024 and sell it today you would lose (5.00) from holding Mitsui Fudosan Co or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Overseas Land vs. Mitsui Fudosan Co
Performance |
| Timeline |
| China Overseas Land |
| Mitsui Fudosan |
China Overseas and Mitsui Fudosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Overseas and Mitsui Fudosan
The main advantage of trading using opposite China Overseas and Mitsui Fudosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Overseas position performs unexpectedly, Mitsui Fudosan can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mitsui Fudosan will offset losses from the drop in Mitsui Fudosan's long position.| China Overseas vs. Longfor Group Holdings | China Overseas vs. Mitsui Fudosan Co | China Overseas vs. Mitsubishi Estate Co | China Overseas vs. Sino Land |
| Mitsui Fudosan vs. Longfor Group Holdings | Mitsui Fudosan vs. Mitsubishi Estate Co | Mitsui Fudosan vs. Sino Land |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
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